LightSquared’s announcement yesterday that it had fixed the GPS interference problem had me scratching my head because it didn’t seem like much of a solution at all. At best, it was a band-aid measure to a problem that threatens to derail the company’s entire business.
Under LightSquared’s fix, the company will allow its spectrum holdings – the bandwidth its main backer paid $262.5 million for last year – lay fallow for the next several years as it deploys its network in spectrum owned by Inmarsat, unless LightSquared decides to use it for supplementary satellite service or sells it to another company interested in satellite spectrum.
Mobile broadband services running on Inmarsat’s spectrum, which is located farther away from bands used by GPS, are ostensibly less likely to interfere with most GPS receivers. LightSquared planned to lease Inmarsat’s spectrum as part of its long-term plan.
But there’s a catch: Even after LightSquared goes through all the hassle of using a different spectrum band, high-precision GPS receivers – the receivers that have been the subject of so much concern by the government and the GPS industry – may still get knocked out by LightSquared’s network.
To quote LightSquared: “Test results show this lower block of frequencies is largely free of interference issues with the exception of a limited number of high precision GPS receivers that are specifically designed to rely on LightSquared’s spectrum.”
As you might expect, the proposal was met with a cool reception from the GPS industry.
LightSquared’s self-described “comprehensive solution” not only could waste its considerable spectrum investment and complicates its build-out plans, it doesn’t even completely fix the GPS interference issue. Even with this plan in place, the FCC may still decide that LightSquared’s network poses too much risk to GPS and force the company to scale back its plans or yank the company’s waiver to run terrestrial-only service in the L-band altogether.
Another sticking point is LightSquared’s decision to operate its base stations at half-power. I had a brief discussion with LightSquared about this part of the plan, and they assured me that they would be able to cut their transmission power by 50 percent without having to deploy additional base stations.
But even after hearing their explanation, I just don’t see how it’s possible. I agree with LightSquared that cutting the power of its base station transmitters will reduce the likelihood that its network will affect GPS, but I don’t see how the company can reduce its signal strength without increasing the number of base stations and not experience a major degradation in the quality of their network.
LightSquared is a Greenfield operator with no existing infrastructure and will need all the coverage it can get. Shifting its transmitters into low gear without a back-up plan for supplementary on-ground coverage is just asking for trouble.
Another point that raised my eyebrows was LightSquared’s continued contention that it will be able to meet its FCC-mandated deadline next year. There’s doubt as to whether the FCC will even allow LightSquared to operate; the company just announced a major change of plans; and it is operating on a Greenfield basis that will make rolling out its network more arduous. How many balls will LightSquared be able to juggle before it is forced to push back its launch plans, FCC deadlines be damned?
Then there are the rumors that LightSquared has landed a network sharing deal with Sprint, which adds further complexity to the company’s outlook. Will LightSquared’s other customers – Leap Wireless, Best Buy, Cellular South – have qualms about sharing the service with the likes of Sprint?
Finally, there’s the most basic question of all: Will LightSquared’s wholesale business succeed where others have failed?
LightSquared’s fix to the GPS interference problem may work, or it may be nothing more than the “Hail Mary” pass alluded to by Trimble’s Jim Kirkland – a last-ditch effort to save the company’s ambitious gambit from failure.
At the very least, LightSquared’s future is looking pretty grim, and its “fix” to the GPS interference issue does little to improve its outlook.